A lot of times, we do not plan for inevitable health failures that arise. We honestly do not spend enough time talking about the importance of health insurance is in our lives.
Inasmuch as we all positively except to be healthy most of the time, life is generally unpredictable.
The older you get, the more you realise how much you need a health insurance plan. It is genuinely a fantastic financial decision to make.
Plus you win on both ends.
Think of the financial stress you would go through if a family member got in a vehicle accident. Without a health insurance policy, you would spend a lot, especially in private sectors, where medical care is costly.
Hospitalisation can derail your finances. Furthermore, it can pull you back in business if the right measures are not in place. Think of this for a moment. What if the person who provides the money is the one who needs medical attention?
It is wise to insure for your health, and your family’s against unforeseen circumstances.
What is Health Insurance?
This is a type of insurance that covers the medical and surgery cost of the policyholder. The policyholder is the person who gets the coverage.
The insurer is an insurance company that offers this coverage and the provider is used to describe the clinic, hospital, pharmaceutical store, or healthcare practitioner that issues the treatment.
Depending on the type of health insurance coverage, the insurer may cater to the treatment cost directly with the provider. In other cases, the policyholder gets their money after paying the medical bills.
Brief History of Health Insurance
The concept of health insurance began in ancient Greece where benevolent societies were formed to care for families when the income of the breadwinner was lost.
The first group of health insurance plans was from mutual insurance companies like cooperatives that were owned by the members. These members became shareholders and divided profits from the company.
In the 19th century, early health insurance was just disability insurance. Patients were asked to make payments for other health care costs out of their own pockets.
During the 20th century, traditional disability insurance evolved into modern health insurance programs. Today, some private health insurance programs cover the cost of routine, preventive, and emergency health care procedures, and also most prescription drugs.
Types of Health Insurance in Nigeria
Here are some types of health insurance plans in Nigeria:
- Preferred Provider Organization (PPO)
- Health Maintenance Organization (HMO)
- Point of Service (POS)
- Exclusive Provider Organization (EPO)
- Health Savings Account (HSA)
- Health Reimbursement Arrangements (HRAs)
1. Preferred Provider Organization (PPO)
A PPO plan is a preferred provider organization health insurance plan. This is a health insurance plan that encourages employees to use a network of preferred doctors and hospitals.
For a PPO plan, services rendered out of the network can result in higher out-of-pocket costs.
2. Health Maintenance Organization (HMO)
An HMO is a health maintenance organization health insurance plan. With this plan, employees spend less out of pocket. However, it comes with less flexibility in choosing doctors and hospitals compared to other plans.
Also, read more on the top HMOs in Nigeria.
3. Point of Service (POS)
A POS is a point-of-service health insurance plan. It combines the features of an HMO and a PPO and it may require employees to choose a primary health care physician.
4. Exclusive Provider Organization (EPO)
EPO is an exclusive provider organization health insurance plan. Just like HMOs, they have a network of physicians that members are required to use except in cases of emergency.
An indemnity health insurance plan is a fee-for-service plan. It has a predetermined percentage of costs paid to the member for services covered.
6. Health Savings Account (HSA)
An HSA is a tax-favored savings account that is used in conjunction with an HSA-compatible high deductible health plan to pay for qualifying medical expenses.
Though HSAs can be attached to group health insurance, they’re owned by employees and small businesses can contribute to them whether they offer a group policy or not.
7. Health Reimbursement Arrangements (HRAs)
Health reimbursement arrangement is a type of health insurance plan that allows employers to provide health benefits without having to offer a group health insurance plan.
With HRA, employers reimburse employees for premiums and even out-of-pocket medical expenses.
How Health Insurance Works in Nigeria
Health care in Nigeria can be very expensive. A single doctor’s office visit may cost several thousands of Naira and an average three-day hospital stay can run into hundreds of thousands (or even more) depending on the type of care provided.
Most of us cannot afford to pay such large sums when we get sick, especially since we don’t know how much care we might need. There is Micro Insurance that helps cater to most of these needs. Health insurance offers ways to lessen these costs to more affordable amounts.
The way it typically works is that you pay a premium upfront to a health insurance company and that payment allows you to share “risk” with lots of other people who are making similar payments.
Since most people are healthy most of the time, the premium Naira paid to the insurance company can be used to cover the expenses of the relatively small number of enrollees who get sick or are injured.
The importance of health insurance in Nigeria
1. Pharmaceutical Care
Pharmacology is essential in the practice of modern medicine. This is why health insurance plans make provision for drug prescription. Although the amount covered varies from plan to plan.
Insurance on pharmaceutical care includes drug prescription and issuing of medications when necessary.
2. Provision of Routine Care
Such as laboratory tests, physical examination, shots, and vaccines, and the likes. As mentioned earlier, depending on the level of health care offered by the insurance plan, coverage of routine visits come with certain limitations.
3. Chronic Condition Treatment
Insurance companies usually cover the bulk of the cost of treating a chronic condition. As long as it isn’t a pre-existing disease or illness. The coverage includes repeated treatment, continual testing, and exclusive intervention when necessary.
4. Emergency Medical Assistance
Health insurance covers various emergencies. They include drug overdoses, accidents, heart attacks, acute illnesses, sudden injuries, and unplanned calamities.
The coverage for emergencies is far more than those of other predictable illnesses. This implies that a higher amount is issued as payment and the deductibles are lower for emergencies. Emergency coverages cover costs like ambulance fees as well.
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